Exercise 149 Prepare financial statements for a manufacturer

Exercise 14-9 Prepare financial statements for a manufacturer LO C4, P2 Using the following data, Garcon Company 14,60019,450 Pepper Company 20,250 11,250 Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory Rental cost on factory equipment Direct labor Ending finished goods inventory Ending work in process inventory Ending raw materials inventory Factory utilities 0,800 24,250 42,200 14,200 17,200 9,600 15,000 5,600 46,500 8,200 1,800 32,500 20,000 21,050 27,100 5,800 12,150 0,900 28,000 1,900 6,740 40,000 actory supplies used General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net 56,000 55,900 50,800 195,030 21,000 320,010 16,200 166,825 23,700 272,500 16,400 1-a. Prepare income statements for both Garcon Company and Pepper Company. GARCON COMPANY Income Statement For Year Ended December 31, 2015 Income (loss) before tax

Solution

Schedule for raw material placed in production for Garcon and Pepper company for the year ending 31 December 2015

                                                                         Garcon company

Raw materials in the begining     $10800

add :current purchases $40000

less: raw materials in the end $ 5800

direct material placed in production $ 45000

Pepper company

Raw materials in the begining     $11250

add :current purchases $56000

less: raw materials in the end $9600

direct material placed in production $ 57650

Schedule for cost of goods manufactured for Garcon and Pepper company for the year ending 31 December 2015

garcon company

WIP inventory in the begining $14900

add:current period manufacturing cost

direct material $ 45000(from above)

direct labor $ 20000

manufacturing overhead $ 23050 (10900+12150)

total WIP $ 102950

LESS: WIP in end $27100

cost of goods manufactured $ 75850

PEPPER COMPANY

WIP inventory in the begining $20250

add:current period manufacturing cost

direct material $ 56750 (from above)

direct labor $ 42200

manufacturing overhead $ 20600 (15000+5600)

total WIP $ 139800

LESS: WIP in end $17200

cost of goods manufactured $ 122600

SCHEDULE FOR COST OF GOOD SOLD

Garcon company

finished goods begining inventory $14600

add: cost of goods manufactured $ 75850 (from above)

less: finished goods ending inventory $21050

Cost of good sold $69400

pepper company

finished goods begining inventory $19450

add: cost of goods manufactured $ 122600 (from above)

less: finished goods ending inventory $14200

Cost of good sold $127850

Income statement for garcon and pepper company for the year ended 31 december 2015

balance sheet of Pepper company on 31 december 2015

particulars	garcon	pepper
sales	195030	320010
less:cost of good sold	69400	127850
gross profit	125630	192160
less: operating expenses	87440	112400
operating profit	38190	79760